The Bangladesh leather industry currently contributes a little over $1 billion to GDP. Estimates show that if significant environmental concerns are addressed, economic prospects could be even greater, allowing the leather sector to challenge the RMG sector as the country’s most valuable export segment. Although there is currently a significant gap between RMG and leather segments, the explosive growth of the RMG sector over the past few decades and a large labor force in Bangladesh indicate that the leather industry could grow quickly if given the right circumstances. Foreign Direct Investment in all segments of the leather production chain, including production of tanning chemicals, is likely to grow substantially in the coming years.
Readily available basic raw materials for leather goods, a large pool of low-cost, trainable labor and tariff concession facilities issued by major importing countries have created the right conditions for strong growth in the leather industry. Bangladesh is an ideal offshore location for low-cost and high-quality leather and leather products manufacturing.
Local leather experts calculate potential exports at $5 billion if environmental compliance concerns are appropriately addressed. Foreign customers have expressed serious concerns over the environmentally damaging practices of the leather industry in its current location of Hazaribagh, and some, including the European Union, have considered suspending sourcing of leather from Bangladesh. The government of Bangladesh is working to address these concerns by establishing the new Savar Tannery Estate, which conforms to strict environmental standards. The Central Effluent Treatment Plant (CETP) will be the primary waste management facility of the new industrial estate. While construction of the CETP officially began on March 30, 2014, as of mid-2016, the CETP and Dumping Yard remained unfinished. The construction may be completed by the end of 2016.
This proposed leather industry reform was strongly supported by the Asia Foundation that has contributed to expediting the relocation process by working with the key stakeholders in the government and within the leather industry over the past two years. By ensuring environmental compliance, the leather sector may be able to increase exports to markets such as the United States and the EU and will attract significantly more foreign investment into the leather industry in Bangladesh
- Position:Leather is the second largest export sector of Bangladesh next to RMG
- Export:According to EPB [Export Promotion Bureau], export of leather and leather goods crossed $1 billion in fiscal 2014-15 for the second year in a row. Bangladesh exported leather and leather goods worth $1.13 billion in 2014-15 which was $1.12 billion in the previous fiscal year,
- Markets:Italy, UK, Belgium, Spain, France, Germany, Poland, the US and Canada are the big markets for Bangladeshi leather and leather goods.
- Global Market Size:The total size of global leather market is worth about $215 billion, according to sources.
- Our Share:Bangladesh now exports 5 percent of the global leather and leather goods market.
- Collaboration with The Asia Foundation:Ministry of Industries and The Asia Foundation are working closely to relocate tannery industry and have sorted out long term plan to shift tannery of Hazaribagh, Dhaka to Savar tannery industrial park.
- New Opportunity:Three giant leather exporting countries China, Vietnam and Brazil are shifting their focus from leather industry due to labor cost, which about to open up huge opportunity for Bangladesh.
- Moving up:Bangladesh leather industry is moving for value added expensive products. According to a recent statistic, in 2008, 62% of all export earnings from the sector came from finished leather, but by 2014, this proportion had fallen to 39%. However, earning has significantly increased in the higher value-added categories of leather goods and footwear.
- Eco-friendly leather:Bangladesh is one of the fast growing eco-friendly leather manufacturers. RMM Leather Industries, a local leather manufacturer, received first international award for production of eco-friendly leather from Bangladesh.
- Products:leather shoes, travel bags, wallets, belts and finished leather are few top export items from Bangladesh
- Market Size For Footwear:Current market size for footwear industry is around $550-million per annum, according to industry experts. Given the growth prospect it may become a $15-billion sector within a few years.
- Footwear Manufacturer:According to the LGFMEA, 110 export-oriented factories manufacture footwear in the country.
- Local Footwear Market Size:The estimated domestic footwear market size is between 200 and 250 million pairs a year.
- Best:Bangladeshi leather is the best in the world after the French product.